Unbundling could be costing you a bundle - code manipulation - includes related articles on the Current Procedural Terminology,

Business & Health, March, 1990 by Maria R. Traska

Unbundling could be costing you a bundle

Call it unbundling or a la carte billing. Call it fragmentation. Exploding charges. Burst billing. Upcoding. Code creep. Visit churning. Deliberate miscoding. Or even multiple billing.

It all falls under the category of code gaming, and consultants and payers claim it's responsible for physician charges increasing at an alarming rate.

How extensive is the problem?

Payers say they're still trying to determine that, but estimates vary from a miniscule percentage of total physician claims to as high as 15 percent. However, consultants warn that even a fraction of a percent of all physician claims can translate into thousands of dollars in alleged overcharges.

Not all the coding manipulations involve fraud as the term is legally defined. In fact, some of these billing practices may not even be unethical, payers admit.

GMIS, Inc., a Malvern, Pa., software firm, estimates from audits it conducted for a few Blue Cross and Blue Shield plans, commercial carriers, HMOs, and a self-administered employer, that on average, one-fourth of all surgical multiple-procedure claims submitted by physicians contain a coding manipulation, overpayment, or overcharging problem. GMIS estimates resulting losses to the health care industry of $1 billion to $2 billion a year, although it isn't clear how realistic that estimate is.

National Medical Audit, a San Francisco-based division of benefits consultants Mercer Meidinger Hansen, Inc., reviews provided networks, third-party administrators, and contract vendors for employers. NMA has conducted about 100 audits of various preferred networks (for both HMOs and PPOs) consisting mostly of primary care doctors with a few specialists. NMA figures that "even among so-called preferred providers, 12 percent to 15 percent of all physician billing involves some code gaming or overcharging," says Arnold Milstein, M.D., NMA's president.

Many payers and software vendors say that with physician incomes under pressure from managed care contracting and cost cutting by Medicare and Medicaid, code gaming is increasingly gaining favors as a way to recoup lost income. They point to the explosion of courses and seminars offered by various consultants to physicians and their office staffs - courses that promise to teach them to use CPT-4 and other coding systems to maximize their third-party reimbursement.

The software consultants, meanwhile, are likewise making big money by selling payers and employers automated systems that promise to catch physicians in the act and "repackage" the claims to bring charges back into line. Some payers are, in fact, using these programs successfully to lower their total physician claims paid; but the systems haven't been in use long enough for payers to provide good estimates of how much is actually being saved annually. And they are loath to call the original claims "fraud" - they prefer the term "overpayment."

A glossary of terms

Code gaming involves the manipulation of CPT-4 (see box for explanation) or other codes used by payers in order to get higher reimbursement for medical procedures than would be paid otherwise. Unbundling or a la carte billing is a form of billing fragmentation; it involves breaking down a procedure or procedures into components and billing separately for each component - even though that procedure or group of procedures is already included in a single, comprehensive code.

The debate isn't really about which code is more appropriate per se; it's about the dollare value payers assign to different codes.

Comprehensive multiple-procedure codes are usually assigned lower payment rates. Payers say most doctors customarily charge less for the second procedure when more than one is performed at the same time. This is particularly true for surgical procedures; more than one procedure may be performed with just one incision and one anesthetic, and the second procedure can be considered a logical extension of the first, depending on the circumstances.

For example, a total abdominal hysterectomy with a Marshall Marchetti-Krantz procedure (CPT code 51840) is supposed to include salpingectomy (removal of the Fallopian tubes) and oophorectomy (removal of one or both ovaries). But billed as a single package, the procedure pays significantly less than the hysterectomy with MMK, salpingectomy, and oophorectomy billed separately. GMIS says the claim could be up to $4,000 higher if billed unbundled.

A worse example would be a bill for code 51840 (the bundled procedures) plus all the separate components. That would be the equivalent of billing for two total hysterectomies for one patient.

Going to pieces

Fragmentation of incidental procedures is another version of unbundling: Incidental procedures are typically done as part of a larger procedure and, because they take little extra effort, aren't usually reimbursed separately. For example, an appendectomy can be incidental to a total removal of the stomach. But when performed together and billed separately, each can increase the cost of the gastrectomy by half.